The Bubble Sitters: Jordan and Linda Celkupa

A rapidly shifting real estate market, a waterfront
apartment with a view of Manhattan and some number-crunching. Those are
the factors that Jordan and Linda Celkupa considered before selling their
condo and renting a bigger apartment.

"My logic was that renting
is throwing money away into the ether," Jordan Celkupa says. So he resisted
Linda's desire to sell their one-bedroom condo in Hoboken, N.J., and rent a bigger
unit in a high rise she had dreamed about.

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He
resisted until he ran some calculations. As a financial planner, that's what he
does for a living. Jordan realized that he and Linda could lock in a sizable gain
on the sale of the condo and seize an excellent rental deal in the Hudson
Tea Building, a pair of converted warehouses nestled on a cove in the Hudson
River across from midtown Manhattan.

"Based
on my calculations, we have enjoyed renting this unit as if it was priced as a
$450,000 equivalent condo, even though the market value is worth more in the range
of $600,000," he says.

In short, "we never
could have afforded living in this home if we had bought it," he says.

The Celkupas ended up renting the apartment through a mixture of circumstance,
computation and longing.

Jordan and
Linda Celkupa

Bought:

Undisclosed amount in 1998

Sold:

Undisclosed amount in 2002

Appreciation:

65 percent in 4 years

Rent apartment for:

Payments equivalent to a $450,000
mortgage after "some aggressive negotiating"

Sold because:

A great rental deal was available
on the waterfront, with views of Manhattan

Renting a sparkling view
Their condo was about a 15- or 20-minute walk from the Hudson River. By
contrast, the Hudson Tea Building is so close to the river that a madman
with strong legs could leap into the water, given a running start from
the roof atop the 12th floor. Linda had admired the apartment complex
because of the waterfront location, and views of Manhattan and the George
Washington Bridge.

But Jordan said there was no way they would move to a rental-only
apartment complex because he didn't want to waste money. But in the aftermath
of the Sept. 11 terrorist attacks, he started paying closer attention
to the real estate market. He says there was a great flowing of people
back and forth.

"The market in 2002 was quite unique,"
he says. Manhattanites "were rethinking their commitment to both
living and working on the island" and moving across the river to
New Jersey. The result was a housing boom in a narrow strip of New Jersey
that's in sight of Manhattan.

Sept.
11 causes moves and bargains
As home buyers moved in from Manhattan, renters in Hoboken discovered
that there were good rental deals across the river in New York, Jordan
Celkupa says. They left just as a batch of rental apartments buildings
came on the market in Hoboken.

In Hoboken, Jordan says, these back-and-forth movements
resulted in rising purchase prices for houses and condos, but bargains
abounded in the rental market. That closed off one opportunity, but opened
another.

They had bought their condo in 1998, and
by late 2002, its value had risen 65 percent. The Celkupas considered buying another
place and keeping the condo so they could lease it to a tenant. But that wouldn't
work: "Despite the gain in market value on our property in the four years
we owned it, the equivalent rent had actually decreased during that time,"
Jordan says. Renting out the condo would have squeezed their finances.

But the weak rental market made the desirable Hudson Tea Building affordable after
"some aggressive negotiating." So in October 2002 they sold the condo
for that 65 percent capital gain (he's mum on the exact amounts) and moved into
the apartment on the river with the nice views out of 12-by-10-foot picture windows.

In hindsight, Jordan says, they could have bought a two-bedroom condo (away from
the river, natch) and pocketed even more capital gains. "However, I would
not trade this wonderful living experience for an additional 20 percent on our
last condo," he says. And in two-and-a-half years their rental payments have
been $25,000 less than they would have paid on the mortgage on the condo they
owned.

End of rented bliss?
The Celkupas' renting days could end soon. Toll Brothers, a developer of high-end
homes, has bought the pair of apartment buildings and intends to sell the units
as condominiums. Some renters oppose the conversion because, even at an insider
price, they will pay more to own than to rent.

"It's
kind of tacitly sending along this message that there's a disconnect between these
two markets" -- the purchase market and the rental market, Jordan says. "And
there's this issue that maybe we are at a market top and these sophisticated real-estate
companies are realizing that there could potentially be a bubble here."

The Celkupas and other renters are holding out for an insider's
discount of at least 20 percent: "Our little bubble-sitting game
may be over if the inside price is right."